Aussie wheat rides high on Europe’s wheat woes

AWB has raised its forecast wheat pool returns for the 2010/11 season for the third month in succession, this time by $9-22 a tonne, as the world wheat market continues responding to production concerns in northern Europe and the Black Sea region.

AWB’s estimated pool return (EPR) for benchmark grade APW wheat in the Western Pool is now $353 a tonne, up $14, ANW1 noodle wheat is now $373 a tonne, up $19, and APW wheat in the Eastern Pool is up $12, to a new EPR of $345 a tonne (FOB, excl GST).

AWB’s General Manager Commodities, Mitch Morison, is currently visiting customers in Asia, and said the upward trend in prices was a very positive situation for Australian growers.

“The earliest part of the Australian winter crop harvest has commenced in central Queensland, which means the first of this season’s grain will soon be available,” Morison said.

“Production prospects in the rest of the wheatbelt from Queensland right around to South Australia have just received a boost from recent rains.”

“Notwithstanding the unfortunate people suffering from localised flooding in some areas, it’s a great start to the spring growth period and the timing couldn’t have been much better from the market’s perspective.

“The market is aware that weather damage in northern Europe has reduced the supply of higher quality milling wheat in that region and drought has cut crops in Russia, Ukraine and Kazakhstan to the point that exports through the Black Sea will be very limited.

“This means there is very strong interest for Australian wheat, both to make up for the lost volume in the global trade and supply higher quality needs.”

“The interest is helping to generate better physical prices for Australian wheat on top of the general improvement in world prices, so we are in a strong position talking to customers about shipments both in bulk and containers.

“Growers have already committed substantial tonnages to AWB through our early commitment contracts, with more on our books each day through the $10 a tonne premium offer we currently have open – that’s a good message to be able to tell our customers,” Morison said.